.

Thanks for posting alan, I found those same number, just never got around to posting them myself.

Those are from their Q3 update report whatever. I'm thinking we'll end up waiting until the Q4 results are released by Netflix, which may be as much as a month later; I don't see any other way for these numbers to get released shy of media leaks.

-NapkinG-

These numbers have been around for a little while, and are not encouraging for this prop. Especially the part that says "The company expects to end the year with 8.95 to 9.25 million subscribers..."

So why has this stock gone up all of a sudden? Well, Netflix has partnered with MS (through Xbox live) and Tivo to download movies. Looks like a great marketing angle, but is it going to increase Netflix's subscriber base to 10 million by the end of the year?

It wouldn't be surprising if a number of people are assuming Xbox online subscribers (there's 14 million of them)will now be Netflix subscribers, or that Tivo users will also be Netflix members.

That simply isn't the case. Tivo and XBox users are simply able to download Netflix movies IF THEY ARE ALREADY NETFLIX SUBSCRIBERS. Check out "http://www.businessweek.com/innovate/content/nov2008/id20081126_283931.htm?campaign_id=rss_daily

especially the part where it says "Netflix subscribers can log into their accounts directly from the NXE (Xbox 360 version) and stream one of the 12,000 movies available from the company's Web site."

Also check "http://www.upi.com/Entertainment_News/2008/10/30/TiVo_Netflix_team_up_for_streaming_deal/UPI-30301225399411/

especially the part that says "content from Netflix on the TV via TiVo DVRs will be offered at no additional charge to customers who SUBSCRIBE TO BOTH SERVICES." (caps mine)

The Xbox live group and Tivo group are NOT automatically Netlix subscribers. They will not count for the prop, because they ALSO have to subscribe to Netflix.

Now do these two partnerships have the possibility of increasing Netflix's subscriber base by around a million over estimates... before the end of the year?

Unlikely. This would be an increase in their subscriber base by almost 20% IN A SINGLE QUARTER. This would be a wet dream for any large company, like jumping from $4 billion a year in revenue to $5 billion in three months.

Sure, they might get a big spike in "members", which includes the people who sign up for the freebee 2 week or 30 day memberships out there... but members are not "subscribers", the paid members who get counted on the books.

The prop requires ten million "subscribers".

So let's review why this is short, in Mickey Mouse steps; 1.) Popsci put out a prop predicting Netflix subscriber base to exceed even the company's expectations, 2.) Netflix itself has downgraded it's expectations, 3.) Netflix has downgraded its expectations because consumers are reigning in their spending (read the article cited above, or anything about the economy these days), 4.)Netflix partnerships with MS and Tivo only apply to paying Netflix subscribers, and 5.) free and trial memberships are not "subscribers" and will not be reported as such by any company (since they don't pay, they do not count as subscribers-- they get carried on the books as an expense).

Ultimately, the thing that decides this prop will be Netflix's own numbers, and there will be no BS "I didn't understand", "spirit of the prop", "the word 'subscriber' suggests 'user'" etc.

But if you have the balls to state an opinion before the prop gets settled, please do it now.

In the meantime, this is short, short, short.

Agreed on many of your points vulg,

Yeah, when I first heard about Xbox Live Gold accounts gaining streaming access to their Netflix accounts I too though it would increase the subscribers base (and I still do). You are right that not all Xbox Live accounts count as Netflix subscribers. To gain access to Netflix streaming via Xbox 360 you have to have: a Netflix subscriber's account, an Xbox Live Gold account (so you're paying both M$ and Netflix) and finally live in a supported Xbox Live region (ie. only the States)[curses, no movie streaming for me].

So, even though the appeal is there for Xbox customers to start up a Netflix account I'm pretty sure Netflix would have included those estimates into their numbers themselves. I believe that these partnerships will increase subscribers but those numbers are likely already estimated and accounted for.

This leaves us with Netflix's own estimates that they won't reach 10M by the end of year. Who else better than the actual company to estimate their own outlook?

-NapkinG-